Spanish Pensioners Win Rare Victory Against Banks’ War on Cash

After bearing the brunt of the banks’ years-long war on cash, elderly customers have had enough and are not going to take it anymore.

Spain’s largest domestic lender, Caixabank, has been forced to stage a historic retreat in its years-long war on cash — and all because of widespread protests by many of its elderly customers who have had enough of having to jump through hoops to access their own money in the form of cold, hard cash. As with most large banks in advanced economies, Caixabank — which now has more domestic assets than any other bank in Spain after buying up former bailout recipient Bankia — has spent much of the past decade culling its branches and ATMs, making it much more difficult for its customers to access cash services.

Making Life Increasingly Hard for Cash Users

In 2017, Caixabank went a step further by limiting cash services in its branches to less than three hours a day, from 8:15 am to 11 am — a practice it first piloted in branches in Madrid and quickly rolled out across the country, as I reported at the time for WOLF STREET. After 11 o’clock all cash operations, including the settlement of bills and cash withdrawals and deposits, had to be conducted through an ATM.

Since then all of the major banks in Spain have dramatically cut back their number of branches and ATMs. In the last year alone 10.8% of all bank branches have closed, leaving many rural localities without access to cash services. Spain is now home to just 20,421 bank branches, the lowest number since June 1977 and 55% fewer than the historic high of 46,118, set in September 2008.

In September 2019, BBVA, Spain’s second largest domestic lender, stopped offering cash services altogether at some of its branches. Since then some of its rivals have followed its lead. When BBVA announced the change to its services, it invited customers to use its network of more than 6,000 ATMs instead. But the pandemic-induced boost to digital payment services has merely accelerated the shift away from cash, at least among younger generations. To further accelerate this shift, BBVA has cut back whittled down their number to 4,871.

The Final Straw

Since acquiring the formerly state-owned lender Bankia in September 2021 for the exceptionally reasonable price of €4.3 billion (a drop in the ocean compared to the more than €20 billion of public funds mobilised to bail out Bankia following its collapse in 2012), Caixabank has intensified its cull of branches. But the bank’s elderly customers, who have been hardest hit by the withdrawal of cash services, are no longer going to stand idly by as this happens. They have had enough, as the following excerpt from El Comercio spells out:

Pedro Carretero was born in Cáceres, but at the age of six he moved to Gijón. He is 74 years old and for the last 55 years he has remained faithful to the same bank… Always with staff who attended and helped him. But the relationship has changed. “It’s shameful what happens to older people. You have to make an appointment and at eleven in the morning they no longer attend you. The older ones not have difficulty using the cards…” he says.

The banking digitization process, accelerated by the pandemic, the reduction of personnel and the closing of branches have put many people like Pedro Carretero, who do not know how to use the internet, in a very difficult situation. “Young people do everything by mobile and in the end it’s us older people who pay the price. There are people who have to get up at nine in the morning just to take out their own money,” he says.

The situation is the same across his social circle. “People my age are all pissed off and angry. They have no right, “says this former miner who also complains about the constant changes introduced in the ATMs. “Every now and then they change them and you have to adapt again.”

In late December, a retired 78-year old doctor called Carlos San Juan organised a petition on change.org to call for “more humane treatment” in bank branches. This set off an avalanche of complaints from citizens and consumer protection agencies about the difficulties many of the country’s elderly and most vulnerable face in trying to access physical money, particularly in rural areas. The discontent became so widespread that calls began pouring in for “a payment card strike” on March 5, which spread like wildfire across social media and and messaging apps like WhatsApp and Telegram.

Delicious Irony

The irony is delicious: senior citizens using the latest communications technologies to call for a nationwide one-day strike in favor of cash payments. Given the importance of pensioners and senior citizens for Caixabank’s business — the bank is home to 30% of all domiciled pensions in Spain and the elderly tend to have a lot more capital and disposable income than the more digitally astute younger generations — the lender’s senior management has finally began to change policy.

The lender has presented a dozen new initiatives aimed at mitigating or reversing the “exclusionary effects” of its digital banking policies, including removing the time limits on in-branch cash services. Other banks are following suit. It is so rare to hear a large lender admit in public that its prioritisation of digital payments at just about any cost has proven to be detrimental to many of its most vulnerable customers.

As I noted in a previous article on BBVA’s discriminatory policies against cash users in Mexico, a country where cash is still used in the vast majority of transactions, the ongoing war on cash is often waged under the banner of “financial inclusion,” despite the fact that a cashless economy would be anything but inclusive:

Those who stand to benefit most from a cashless economy are younger generations in the more closeted classes, who are largely computer literate and already use digital payment methods for most, if not all, of their transactions. Life will become somewhat easier for them.

By contrast, those more dependent on cash — the poor and the elderly — will suddenly find life a lot harder. This is already happening in Spain, where the elderly, for whom cash is still the preferred use of payment, have to travel further and further afield to continue getting hold of cash. The older you get, the harder it is to travel, especially if you can no longer drive a car.

But now the elderly are hitting back where it hurts. And they enjoy the support of consumer protection organisations like FACUA, which has denounced Spanish banks’ refusal to offer cash services to depositors to the European Commission after the Spanish government refused to even respond to its questions, according to the financial website Economia Digital.

Bending the Rules

Facua spokesman Rubén Sánchez says that Spanish regulations clearly state that customers of basic payment accounts have the right to withdraw money in cash both at the teller window and at ATMs, and that they are only obliged to do so at the ATM if the branch is closed. Yet when Facua took its concerns to the Bank of Spain, the central bank responded that banks are not obliged to give money over the counter “despite the fact a complete reading of the royal decree in question states otherwise.”

In other words, the banks can do whatever they want. But now they are having to change course and rediscover their humanity (or at least pretend to) thanks to the sustained pressure from their elderly customers.

“We announce our firm commitment to the elderly: we are going to expand our customer service measures that we had already been developing, based on specialisation and personal relationships,” said the bank’s CEO, Gonzalo Gortázar.

CaixaBank says it is the first bank to create a team of employees specialized in serving elderly customers, with specific training in gerontology and dedicated to offering support based on closeness, trust and quality contact. Currently, the financial entity has 750 elderly advisors, mainly located in urban offices with high volumes of pension-age clients. In a month, the size of this team will double to 1,500, a figure that will rise to 2,000 next year.

At the same time Caixabank has decided to bulk up its branch staff by hiring an extra 1,350 more employees, who will help both senior customers and those from Bankia to familiarize themselves with CaixaBank’s services and tools. But that may not be enough.

Many workers at the bank and other lenders are far from happy with work conditions and are threatening industrial action. They already feel overworked after a relentless decade-long cull of branch workers has left them having to do far more work than before. In 2021 alone the large banks laid off 12,330 workers.

It is not just the elderly in Spain that are pushing back against the banks’ war on cash. A new pro-cash initiative called Plataforma Denaria is gathering public support for freedom of payment choice and underscoring the benefits of banknotes and coins to the nation’s economy and society. In its mission statement, the Denaria Platform argues that cash is a universal, free payment method and a symbol of individual rights and freedom that serves as a pillar of financial inclusion.

“Since data is the new oil, cash is a symbol of freedom,” says Javier Rupérez, the president of Plataforma Denaria. “We believe that cash is a public good that must be protected. It is the safest, most democratic, accessible, and equal method of payment and must be protected by European regulators.”

In a survey carried out by Denaria, 90% of respondents living in more rural areas of Spain said they support continued access to cash. In addition, 41% consider that digital forms of payment are not accessible to the rural population. For 76% of respondents, cash is still the most accessible and democratic form of payment.